Debt collection

DC takes action to tackle ‘aggressive debt collection’ after COVID protections expire

DC Chairman Phil Mendelson and Attorney General Karl Racine are proposing legislation to protect consumers in the district from “unfair and abusive debt collection practices.”

DC Chairman Phil Mendelson and Attorney General Karl Racine are proposing legislation to protect consumers in the district from “unfair and abusive debt collection practices.”

Mendelson introduced the bill on Monday, which was drafted in conjunction with the attorney general’s office. According to a statement, the legislation “would modernize the district’s outdated debt collection law, which was written in 1971 and currently does not cover most types of consumer debt, including medical and card debt. credit ”.

A key goal is to ensure consumer protections are in place when DC’s COVID-19 public health emergency legislation expires.

DC will not renew its pandemic emergency, it was confirmed on Monday.

“When the district’s COVID-19 protections expire, residents struggling to recover will face a wave of aggressive debt collection activity – and we know this activity will disproportionately affect residents of color. Racine said in a statement.

“Our current debt collection law was passed 50 years ago and needs to be updated to take into account modern forms of communication and tackle abusive debt collection practices. My team worked closely with President Mendelson and community advocates to develop this legislation, which would provide protections for DC residents in the 21st century. I encourage Council to act quickly to make sure we have the tools we need to protect consumers and prosecute debt collectors who take advantage of district residents.

President Mendelson added, “As the public health emergency draws to a close, the debt collection protections in place will expire. Meanwhile, we realized that our 50-year-old consumer protection law has not kept pace with technology. We must do all we can to protect our most vulnerable residents from harassment. Now is the time to strengthen consumer protections and the tools available to prosecute debt collectors who take advantage of consumers. “

According to the statement, the legislation would update DC’s debt collection laws by:

  • Extension of protections to cover medical and credit card debts: Medical debt and credit card debt are among the most common forms of debt held by consumers, but the collection of these debts is not regulated by current DC law. This legislation would prohibit abusive collection practices for all forms of consumer debt, including medical debt and credit card debt.
  • Prohibition of harassment by debt collectors: The bill would ban excessive communications that constitute harassment, including making more than three phone calls in a seven-day period. The law would be broadened to clearly apply to modern forms of communication, such as texting and e-mail. This legislation would protect consumers from harassment in all forms of communication.
  • Reinforcement of existing protections for DC consumers: Under current district laws, collectors of some types of debt cannot call consumers very early in the morning or late at night, call anonymously, use foul or threatening language, or make false statements about the situation. a person’s debt to employers or family members. In addition to expanding the types of debt covered by these protections, under this legislation, debt collectors would not be allowed to disclose information about a person’s debt to their employers or family members.
  • Stop the criminalization of poverty: Creditors are increasingly using the legal system as a tool to collect debts, and under current law, if the consumer does not show up for a proceeding, the creditor can request that an arrest warrant be issued for them. the arrest of the consumer. This bill would eliminate the possibility for creditors to jail consumers for contempt of court in these circumstances. It would also clarify that no one can be jailed for non-payment of a debt.
  • Clarify that the law applies to buyers of debt: The bill would clarify that debt buyers must follow all laws applicable to debt collectors. This would force debt buyers to comply with additional requirements, such as providing itemized statements and account numbers for debts owed, to prevent attempts to collect inaccurate or expired debts.
  • Increased penalties for debt collectors who break the law: This law would establish clear financial penalties for violators, including additional penalties of up to $ 4,000 per injured party.

Emergency legislation is available online.

Temporary legislation is available online.

How to Report Unfair Commercial Practices

To report scams, fraud or unfair business practices, contact the OAG Consumer Protection Office by:

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